ABORIGINAL LEGAL ISSUES e-newsletter

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1 August 1, 2017 ABORIGINAL LEGAL ISSUES e-newsletter Supreme Court of Canada Clarifies Duty to Consult and Accommodate Indigenous Populations Clyde River (Hamlet) v. Petroleum Geo Services Inc., 2017 SCC 40, Supreme Court of Canada (McLachlan C.J.C., Abella, Moldaver, Karakatsanis, Wagner, Gascon, Côté, Brown, and Rowe JJ.), 26 July 2017 ABORIGINAL NEWSLETTER The Supreme Court of Canada allowed an appeal concerning whether the Inuit of Clyde River had been adequately consulted with respect to proposed offshore seismic testing for oil and gas in Nunavut. The Court ordered that an authorization issued by the National Energy Board be quashed. The proponent Petroleum Geo-Services Inc. (PGS) and others applied under the Canada Oil and Gas Operations Act, the legislation governing offshore exploration in the Arctic, to the NEB to conduct offshore seismic testing off the northeast coast of Nunavut. The proposed project contemplated towing airguns through a project area, to produce underwater sound waves, annually between July and November for five years. It was clear that the testing could negatively affect the marine mammal harvesting rights of the Inuit. Under the Nunavut Land Claims Agreement (1993), the Inuit of Clyde River ceded all Aboriginal claims, rights, title and interests in the Nunavut Settlement Area, including Clyde River, in exchange for defined treaty rights, including the right to harvest marine mammals. The NEB launched an environmental assessment of the seismic testing, and the Inuit of Clyde River and others filed a petition against the project with the NEB. The NEB held meetings in various surrounding communities to collect public comment, and representatives of the project proponents attended these meetings. Community members asked basic questions about the effects of the seismic survey on marine mammals, but the project proponents were unable to answer many of them, including which marine mammals would be affected by the testing. The proponents answered That s a very difficult question to answer because we re not the core experts. Oral hearings were not held by the NEB, and through the process the affected Inuit population filed letters of comment with the NEB, expressing concerns about the inadequacy of the consultation and about the testing generally. The proponents ultimately attempted to satisfy the Inuit s questions about the seismic testing by filing a 3,926 page document with the NEB, and having that delivered to the Clyde River offices. No further efforts were made to ensure the questions were answered. The document was not translated into Inuktitut and, due to limited bandwidth on Baffin Island, the document could not be downloaded. Subsequently the Inuit wrote to the Minister of Aboriginal Affairs and Northern Development stating that the duty had not been fulfilled, but could be fulfilled by a strategic environmental assessment. The Minister responded, disagreeing with the view that seismic testing should be put on hold pending completion of a strategic environmental assessment. The NEB granted the requested authorization. It concluded that the proponents made sufficient efforts to consult with Aboriginal groups and that Aboriginal groups had an adequate opportunity to participate in the NEB s process. The approval noted that marine mammals could

2 ABORIGINAL NEWSLETTER August 1, 2017 be affected, but that the testing was unlikely to cause significant environmental effects, given the mitigation measures undertaken by the proponents. The Supreme Court analyzed the process undertaken by the NEB, found that the duty to consult had not been discharged and quashed the approval. The Court found that the NEB approval process triggered the duty to consult. As set out in the headnote to the case: The NEB is not, strictly speaking, the Crown or an agent of the Crown. However, it acts on behalf of the Crown when making a final decision on a project application. In this context, the NEB is the vehicle through which the Crown acts. It is open to the Crown to rely on steps taken by a regulatory agency like the NEB to fulfill its duty to consult. Where the regulatory process does not achieve adequate consultation, the Crown must take further measures. When the Crown is relying upon the regulatory agency to fulfill the duty to consult, that should be made clear to the affected Indigenous groups. The Court found in this case that the NEB had broad procedural powers to implement consultation, and the remedial powers to accommodate affected Aboriginal claims where necessary. Therefore the NEB s process could be relied by the Crown to completely or partially fulfill the Crown s duty. The Court had no difficulty characterizing the required level of consultation as deep, at the highest end of the continuum. In accordance with its previous jurisprudence, deep consultation requires a strong prima facie case for the claim is established, the right and potential infringement is of high significance and the risk of non-compensable damages is high. Here, there were established treaty rights at stake, as well as deep cultural attachment to marine mammals, and a significant risk that non-compensable damages would result. While the Crown may rely on the NEB s process to fulfill its duty to consult, the consultation and accommodation efforts in this case were inadequate and fell short in several respects. First, the inquiry was misdirected. The consultative inquiry is not properly into environmental effects per se. Rather, it inquires into the impact on the right itself. No consideration was given in the NEB s environmental assessment to the source of the Inuit s treaty rights, nor to the impact of the proposed testing on those rights. Second, although the Crown relies on the processes of the NEB as fulfilling its duty to consult, that was not made clear to the Inuit. The NEB could have required oral hearings and formal participation in the process, but instead only limited opportunities for participation were made available. There was no participant funding. The proponents did not answer basic questions going to the heart of the treaty right, and in the words of the Court, to put it mildly, furnishing answers to questions that went to the heart of the treaty rights at stake in the form of a practically inaccessible document dump months after the questions were initially asked in person is not true consultation. A commentary on this decision, along with the companion case of Chippewas, from The Resource, BLG s Energy Law Blog, is republished below. The Court determined that the NEB s process did not discharge the duty to consult. As set out in the headnote:

3 ABORIGINAL NEWSLETTER August 1, 2017 Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., 2017 SCC 41, Supreme Court of Canada (McLachlan C.J.C., Abella, Moldaver, Karakatsanis, Wagner, Gascon, Côté, Brown, and Rowe JJ.), 26 July 2017 The Supreme Court of Canada dismissed an appeal from a decision of the Federal Court of Appeal relating to whether the appellant Chippewas of the Thames First Nation had been adequately consulted with respect to approvals relating to a pipeline in Ontario. Enbridge Pipelines applied to the NEB to modify its Line 9 oil pipeline, reversing the flow of part of the pipeline, increasing its capacity and widening its specifications so it could carry heavy crude oil. The NEB held a public hearing, and 19 Aboriginal groups, including the Chippewas of the Thames First Nation, were informed of the proposed project and the NEB hearing process. The Chippewas of the Thames were granted funding to participate in the NEB process, they filed evidence, and delivered oral argument delineating their concerns. After their participation was complete, they wrote a letter to the Crown, asserting Aboriginal and treaty rights, outlining the project s potential impact, and stating that no Crown consultation had taken place. The Minister of Natural Resources responded after the NEB process was complete, stating that he would be relying on the NEB s process to fulfil the duty to consult. The NEB approved the project subject to conditions, some of which related to indigenous communities. It assessed the potential impact on Aboriginal rights as being limited, given that no new land would be acquired as a result of the project. Therefore, the NEB was satisfied that potentially affected Aboriginal groups had the opportunity to share their views through the NEB. The conditions required Enbridge to file an Environmental Protection Plan, an Ongoing Engagement Report and required Enbridge to include Aboriginal groups in Enbridge s continuing education plan. The Chippewas of the Thames appealed, stating that the approval could not be issued without the duty to consult and accommodate being met; the Crown and Enbridge argued that the duty could be met through a regulatory hearing, and that the duty to accommodate was met through the conditions that were imposed. The Supreme Court went through a similar analysis as it did in Clyde River when considering whether the Crown fulfilled its duty to consult the Chippewas of the Thames River. The Court held that the commencement of the NEB process triggered the duty to consult. Further, it held that the duty to consult can be fulfilled by a regulatory agency, provided that the agency possesses the statutory power to do what the duty to consult requires in the circumstances. If the agency does not have the power or if it does not provide the adequate consultation and accommodation, the Crown must do so independently. As the NEB was the final decision-maker on this project, it was required to consider whether the Crown s consultation was adequate, and was therefore capable of satisfying the Crown s duty to consult. The Court held that the Crown s duty to consult was discharged by the NEB process. The headnote reads: The duty to consult is not the vehicle to address historical grievances. The subject of the consultation is the impact on the claimed rights of the current decision under consideration. Even taking the strength of the Chippewas claim and the seriousness of the potential impact on the claimed rights at their highest, the consultation undertaken in this case was manifestly adequate. The Court held that the opportunity to participate in the hearings was provided and taken, a written decision was issued recognizing the treaty rights, and suitable conditions were imposed. It also found that any potential impacts on the rights of the Chippewas of the Thames were minimal and could reasonably be mitigated, thus implying that the duty to consult was somewhat less onerous than in Clyde River. Finally, it found that the NEB had successfully balanced the treaty rights of the First Nation and the economic interests of Enbridge at the accommodation stage. Though the Crown failed to notify the Chippewas of the Thames that it intended to rely on the NEB hearing to discharge the duty to consult, and while the Chippewas argued that was fatal to the application, the Supreme Court found that they were provided with opportunities to participate, and did participate, in the process. A commentary on this decision, along with the companion case of Clyde River, from The Resource, BLG s Energy Law Blog, is republished below.

4 Commentary: Roadmap Established for Project Proponents on How to Satisfy Duty to Consult and Accommodate Indigenous Populations ABORIGINAL NEWSLETTER August 1, 2017 The Supreme Court of Canada has unanimously clarified several features of the Crown s duty to consult with and accommodate indigenous populations prior to project approvals being granted. The companion decisions of Canada s top court in Clyde River (Hamlet) v. Petroleum Geo- Services Inc., 2017 SCC 40 and Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., 2017 SCC 41 clarify when the duty to consult is triggered; confirmed that the Crown can discharge its duty to consult through the project approval process undertaken by the regulatory body (including the National Energy Board (NEB), which for the most part had declined to assess how a project affected Aboriginal or treaty rights); and also illustrated how to, and how not to, discharge the duty. In our view, these decisions set out benchmarks for discharging the duty to consult, and while the duty to consult is the Crown s obligation, it is project proponents who are often left to carry out or bolster the consultation process. Without the duty being discharged, a project approval process cannot proceed, and therefore it is essential that the project proponent ensure the Crown s duty is discharged. This can mean paying for participation in the process by affected Aboriginal parties, for example, or providing the requisite information about the project to the affected parties so that consultation can be robust. Therefore, while the Court was clear that each situation should be viewed independently, the Court provides an illustrative roadmap for discharging the duty to consult, and in doing so has reduced some of the uncertainty plaguing Canadian project approvals. We expect these decisions to be parsed closely by project proponents, to ensure that they have discharged the duty, as if it can be shown later that the Crown s duty to consult was not discharged, any project approval would be quashed on judicial review. Therefore the stakes in ensuring the Crown has discharged its duty consult are extremely high. Background Both the federal and provincial Crown owes a duty to consult indigenous populations whose Aboriginal or treaty rights are likely to be affected by a project approval. The duty arises from the Crown s assumption of sovereignty over lands and resources formerly held by indigenous peoples. The scope of the duty is measured on a continuum, from minor or shallow consultation, to deep consultation. The scope depends on the strength of the Aboriginal rights claim of the affected indigenous population, and the seriousness of the potential impact of the exercise of those rights. Each duty to consult is unique, as it is based on a particular set of rights and impacts. One way to ensure the duty to consult is satisfied is through the project s regulatory approval process itself. By ensuring meaningful Aboriginal participation in a process, and issuing a decision that is responsive to issues raised by affected Aboriginal populations, the Crown may well have discharged the duty to consult, depending on the breadth and depth of the scope of the duty. These two cases were likely chosen by the Court for their stark contrast, in order to illustrate how to, and how not to, discharge the duty. Process for Satisfying Duty to Consult In these two decisions, the Supreme Court lays out an illustrative road map for satisfying the duty to consult. We have set it out below. 1. Determine when the duty to consult is triggered if the regulatory body has the power to make a final decision on a regulatory application, and that decision affects treaty or Aboriginal rights, then the duty is triggered when the regulatory process commences. 2. Assess whether the regulatory tribunal has the power to satisfy the Crown s duty to consult i.e. can the tribunal compel witnesses and issue decisions commensurate with the scope of the duty. If it does, and the Crown is relying on the regulatory process to satisfy the duty, it must be made clear to the affected indigenous parties that the Crown is so relying. We note that the NEB had not generally assessed how a project had assessed Aboriginal or treaty rights in its project approval process, and the Court shows here that in these circumstances it was well equipped to do so.

5 ABORIGINAL NEWSLETTER August 1, Attempt to determine the scope of the duty by assessing the Aboriginal rights claim and the seriousness of the impact of the project on those rights. Proponents would be welladvised to assume that discharging the duty will require substantial effort and funds. 4. Ensure that the Crown s obligation to consult is upheld in the specific tribunal process, through notification and active participation by affected Aboriginal parties in the regulatory process, provision of a written decision, and attachment of appropriate conditions to protect Aboriginal rights. Conclusions and Implications These decisions confirm and clarify the process that project proponents and regulators should follow to satisfy the duty to consult and accommodate. Parties may try to copy what Enbridge did in on Line 9, and will avoid the Clyde River process undertaken by PGS and its partners. Provided the duty is assessed, and robustly discharged, applications to quash coming up after the approval is issued seem to have less chance of success. These decisions are very clearly and concisely written, and effectively show what to do, and what not to do. They therefore inject additional certainty into how the approval process should deal with the duty to consult certainty which is more than welcome. Nadir Andrê, Partner BLG, Montréal nandre@blg.com Kent Howie, Partner Electricity Markets khowie@blg.com Steven Bodi, Associate Securities and Capital Markets sbodi@blg.com Scott Kerwin, Partner skerwin@blg.com Miles PIttman, Partner Oil & Gas mpittman@blg.com Adam Chamberlain, Partner Team North and BLG, Toronto achamberlain@blg.com Rick Williams, Partner Environmental Law rwilliams@blg.com Alan Ross, Partner Oil and Gas aross@blg.com

6 Cases Briefly Noted ABORIGINAL NEWSLETTER August 1, 2017 R. v. Henwood, 2017 ABPC 166, Provincial Court of Alberta (Fradsham P.C.J.), 6 July 2017 In a non-aboriginal case, involving whether the Crown was bound by an alleged declaration by a probation officer about an Alternative Measures Agreement, the Court made various statements about the Honour of the Crown. The origin of the concept (described as an interpretive presumption) is found in the law governing the interpretation of Crown grants. The Court quoted from the Canadian Encyclopedic Digest, IV.1 at paragraph 96: The honour of the Crown originated in English law as an interpretive presumption brought to bear when construing Crown grants. When a Crown grant was capable of more than on interpretation, the one to be preferred was the one that upheld the monarch s honour, for the honour of the monarch ought to be more regarded than the monarch s profit. This principle, in this form, still has currency today in non-aboriginal contexts. The Court referred to cases such as Haida, Lieding v. Ontario (1991), and the 1608 case of Roger Earl of Rutland s Case 77 E.R. 555; 8 Co. Rep. 55a. The Court held: I refer to these cases solely to illustrate that the Courts have long taken the view that when interpreting acts undertaken by the Sovereign, interpretations which would reflect badly on the integrity of the Crown will be avoided. 6/2017abpc166.pdf Scott Kerwin, Partner skerwin@blg.com Sagkeeng First Nation v. Her Majesty the Queen in Right of Canada, 2017 SCTC 2, Specific Claims Tribunal (Chairperson Slade), 21June 2017 The Specific Claims Tribunal ruled on the admissibility of an expert report tendered by the claimant Sagkeeng First Nation. The underlying claim relates to whether the claimant (formerly the Fort Alexander Band No. 262) received all of the reserve land to which it was entitled under Treaty 1. The claimant tendered the report of Paul Chartrand during the hearing. The Tribunal agreed with Canada that portions of the report constituted legal and political argument, and were not admissible. Legal and political arguments are not admissible pursuant to the Mohan criteria, as they do not assist the Court as trier of fact. 7sctc2.pdf Scott Kerwin, Partner skerwin@blg.com That spirit of interpretation seems implicit in this comment by the Supreme Court of Canada in Haida Nation v. British Columbia (Minister of Forests) at paragraph 19 (pp ): In making and applying treaties, the Crown must act with honour and integrity, avoiding even the appearance of sharp dealing

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